TL;DR
The Theory of Constraints (TOC) is a systematic approach to identifying and managing the single biggest limiting factor in a production line. By finding the bottleneck, exploiting it, subordinating other processes to it, elevating its capacity, and repeating the cycle, manufacturers can achieve sustained throughput improvements. This post explores how TOC applies step by step in real-world production lines, supported by examples, case studies, and actionable strategies. Read on to understand more.
Introduction
The Theory of Constraints is one of my favorite methodologies within lean, I love simplicity, and this is it. Manufacturing and operations management has always wrestled with the same essential problem: how to get more out of the resources you already have. Traditional approaches often look at improving efficiency across all processes, but in reality, production systems are rarely balanced. Somewhere in the chain, there’s always a constraint — the part of the system that limits overall output.
This is where Eliyahu M. Goldratt’s Theory of Constraints (TOC) becomes game-changing. Instead of trying to optimize everything at once, TOC focuses on the weakest link in the chain. By systematically identifying and addressing constraints, companies can significantly increase throughput, reduce lead times, and improve profitability. Top tip, read ‘The Goal’, written by Eliyahu a story that teaches the thinking.
In this post, we’ll explore how to apply TOC specifically to a production line environment, using practical examples, frameworks, and strategies.
What is the Theory of Constraints?
The Theory of Constraints is a management philosophy that suggests every system has at least one bottleneck or constraint that limits its performance. If you want to improve the system, you must focus on the constraint first.
TOC is built around five focusing steps:
- Identify the Constraint – Find the process step that limits throughput.
- Exploit the Constraint – Make the most of what you currently have at that bottleneck.
- Subordinate Everything Else – Align the entire system to support the constraint.
- Elevate the Constraint – Increase the capacity of the constraint through investment or redesign.
- Repeat the Process – Once one constraint is broken, another will appear — keep going.
Step 1: Identifying the Constraint in a Production Line
What is a Constraint?
A constraint is not just a bottleneck machine. It could be:
- A physical machine with limited throughput
- A workforce skill gap
- A supply chain delay
- A policy or regulation
- Even market demand
Practical Methods to Identify Constraints
- Visual Observation – Where does work-in-progress (WIP) pile up?
- Cycle Time Analysis – Compare cycle times of each process step.
- Throughput Analysis – Find the slowest stage that determines output.
- Data Tools – Use manufacturing execution systems (MES) or ERP reports.
Example:
In an electronics assembly line, workers notice that boards pile up before the soldering station. Even though other steps are fast, soldering has limited capacity, making it the constraint.
Step 2: Exploiting the Constraint
Once you know the constraint, the first priority is to get the most out of it without expensive changes.
Ways to Exploit a Constraint
- Eliminate Downtime – Keep the constraint running as much as possible.
- Prioritise Quality Inputs – Ensure only defect-free materials reach it.
- Reduce Setup Times – Minimise changeovers to maximise run time.
- Simplify Workflows – Provide operators with clear instructions and tools.
Example:
The soldering station can be exploited by:
- Scheduling preventive maintenance outside production hours.
- Feeding only good boards to avoid rework.
- Running the most common product variants in sequence to cut setup time.
Step 3: Subordinating Other Processes
This is often the most counterintuitive step. Subordination means adjusting the rest of the system to support the constraint — even if that means running some machines slower.
How to Subordinate Effectively
- Balance to the Constraint – Don’t produce faster than the bottleneck can handle.
- Pull Systems – Use Kanban or CONWIP to avoid overproduction.
- Buffer the Constraint – Maintain a small WIP buffer before the constraint to prevent starvation.
Example:
If the soldering station can process 100 units per hour, there’s no point in the upstream cutting machine producing 200 units per hour. Subordination means slowing the cutter to 100 units/hour, avoiding waste and excess WIP.
Step 4: Elevating the Constraint
If exploitation and subordination aren’t enough, it’s time to elevate the constraint — expand its capacity.
Ways to Elevate
- Add Equipment – Buy another machine or upgrade existing ones.
- Add Labor – Train more workers to run the constraint.
- Process Redesign – Use automation or lean methods to increase speed.
- Outsourcing – Shift overflow work externally.
Example:
The company invests in a second soldering machine. Throughput doubles, and the constraint shifts downstream to testing.
Step 5: Repeating the Process
Constraints move. Once you solve one, another appears. TOC requires a cycle of continuous improvement.
Example:
After soldering is elevated, testing becomes the bottleneck. The process starts again: identify, exploit, subordinate, elevate, repeat.
Tools and Frameworks That Support TOC
- Drum-Buffer-Rope (DBR) – A TOC scheduling method aligning production to the constraint.
- Critical Chain Project Management (CCPM) – Applies TOC to project environments.
- Lean and Six Sigma Integration – TOC complements waste reduction and variability control.
Case Study: Automotive Parts Manufacturer
A medium-sized automotive parts plant applied TOC:
- Identified constraint: a heat treatment furnace.
- Exploited: reduced downtime and improved maintenance schedules.
- Subordinated: upstream machining slowed to match furnace pace.
- Elevated: purchased an additional furnace.
- Repeat: new constraint became the final inspection stage.
Result: 30% increase in throughput within 18 months, reduced WIP by 45%, and improved on-time delivery from 70% to 95%.
Common Mistakes in Applying TOC
- Optimising non-constraints – Wasteful improvements where it doesn’t matter.
- Ignoring variability – Not buffering the constraint against disruptions.
- Failing to repeat – Thinking improvement stops after one bottleneck is solved.
- Over-investing too early – Buying equipment before fully exploiting/subordinating.
Benefits of Applying TOC in Production Lines
- Higher throughput without proportional cost increases
- Lower lead times and faster delivery
- Less WIP and inventory buildup
- Greater profitability through constraint-focused investment
- A culture of continuous improvement
Conclusion
The Theory of Constraints is a practical, repeatable, and powerful framework for production line management. Instead of spreading improvement efforts thinly, TOC forces focus on the single most limiting factor. By working through the five steps — identify, exploit, subordinate, elevate, and repeat — manufacturers can achieve sustainable, measurable improvements in throughput, efficiency, and profitability.
The key lesson? Don’t optimise everything. Optimise the constraint.
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